While you may think credit scores are only reserved to individuals, a credit score number is also crucial for businesses. A business’s credit score is very similar to a person’s credit score in that it is a metric by which to judge the financial health of a company. A credit reporting agency will evaluate your creditworthiness based on the level of trading activity, outstanding balances, and payment history. A person’s or business’s credit score is crucial as it determines how they can secure financing and the rates they pay. It pays to have a high business credit score, and here are a few ways to improve it:
Pay Your Bills
If you borrow money for a project as a business, freelancer, or individual, you should ensure that you will make enough money to pay back the loan. If you don’t, your credit score will suffer. The best way to improve your credit score is to pay your bills.
You should come up with a payment plan that will enable you to pay your bills on time which will improve your credit score. Do not borrow elsewhere to pay earlier bills, worsening your score. The better thing to do is cut costs or increase revenue and direct it towards bill payment.
Get a Tradeline
You can improve your credit score by adding new tradelines to your credit report. Companies and individuals like brokers can buy tradelines to boost their credit scores. Some companies sell tradelines in bundles that will further increase your credit score, as you can see in this superior tradelines review. Buying tradelines in bulk will quickly improve your credit score and creditworthiness, especially if you have a poor payment history or a high credit utilization rate.
Dispute Errors On Credit Reports
If you can find a mistake in your business credit report, you can and should dispute it. The error might be reducing your credit score to the point where borrowing funds becomes impossible. Rectifying the mistake can improve your creditworthiness and allow you to open a line of credit that may be valuable to your business. You may still qualify for a loan with a bad credit score, but the rates will be harsh. It’s best to dispute such errors, even though it might mean hiring a credit repair service.
It may seem counterintuitive to use credit to improve your credit score. However, if you already have credit, not utilizing it appears far worse to credit reporting agencies than using it. It would be akin to being able to play in a game but standing on the sidelines. Using credit allows you to add positive payments to your history, improving your overall score.
It takes some doing to improve your credit score. It will take time and change your payment and borrowing behavior to do it. However, your business could benefit from having a line of credit, so you should do everything in your power to have an excellent credit score.